Springfield Teachers Assoc. v. Springfield School Directors

Springfield Teachers Assoc. v. Springfield School Directors  (96-349); 
167 Vt. 180; 705 A.2d 541

[Filed 10-Oct-1997]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                            No. 96-349


Springfield Teachers Association,            Supreme Court
Vermont-NEA & Joseph Roy
                                             On Appeal from
    v.                                       Windsor Superior Court

Springfield School Directors                 January Term, 1997


Shireen Avis Fisher, J.

Donna Watts, Montpelier, for plaintiffs-appellees

Georgiana O. Miranda and Glenn C. Howland of McKee, Giuliani & Cleveland, P.C.,
Montpelier, for defendant-appellant


PRESENT:  Gibson, Dooley, Morse and Johnson, JJ., and Allen, C.J. (Ret.), 
          Specially Assigned


       DOOLEY, J.   This is an appeal by defendant Springfield Board of
  School Directors from a superior court decision confirming an arbitration
  award and payment of back wages to plaintiff Joseph Roy.  On appeal, the
  board argues that (1) the superior court lacked jurisdiction because the
  arbitration award was not final; (2) the court improperly granted summary
  judgment; (3) the court improperly rejected its affirmative defenses; and
  (4) the court erred in dismissing the board's counterclaim.  We affirm in
  part, and vacate and remand in part.

       Roy was hired by defendant in 1990 for one year to teach vocationally
  oriented courses in the Occupational Development Program (ODP), a special
  education program at Springfield High School.  His full-time position was
  created by merging two half-time positions, one of which was a temporary
  vacancy created by a leave of absence.  Roy was not licensed to teach
  special education courses, and defendant's superintendent obtained a
  special waiver so Roy could teach for a year.

       After Roy received his certificate to teach special education courses,
  he accepted a

 


  contract to teach again for the 1991-92 school year.  During that
  year, the superintendent notified Roy that the position would not be
  available thereafter because the leave of absence of the half-time teacher
  was ending and the other half-time position was being eliminated. However,
  an ODP teacher, who was teaching academic courses, announced her
  resignation and created a vacancy.  Roy applied for the vacancy, but was
  found unqualified because he could not perform student assessments and had
  limited skills in math and other academic subjects.

       Roy grieved the decision not to hire him for the ODP vacancy, arguing
  that he had reduction-in-force (RIF) rights to be offered available
  alternative positions and that he was qualified for the ODP position. 
  Although he continued to pursue his grievance, he was thereafter offered a
  half-time position for the 1992-93 school year, which he accepted.  On
  August 12, 1993, he resigned this position and moved away, authorizing the
  Springfield Teachers Association and the Vermont-National Education
  Association, hereinafter referred to together as VT-NEA, to continue to
  pursue the grievance.  VT-NEA chose to continue the grievance because it
  believed the board had attempted to avoid RIF rights in this and other
  cases by using one-year employment contracts in violation of the collective
  bargaining agreement.

       The grievance was arbitrated on September 22, 1993.  The issues at
  arbitration were (1) whether the grievance was arbitrable, and if so, (2)
  whether the board had violated its master agreement with VT-NEA when it
  refused to offer Roy the full-time position.  On January 20, 1993, the
  arbitrator issued her award, finding that the grievance was arbitrable,
  reinstating Roy to a full-time position with full seniority, and ordering
  that Roy be made "whole for earnings lost."  The arbitrator made no
  earnings calculation, nor did she specifically retain jurisdiction until
  the parties did so.

       The parties agreed to delay Roy's reinstatement until the 1994-95
  school year.  They were unable, however, to agree on the amount of back
  wages to be paid him.  On June 13, 1995, Roy and VT-NEA filed an
  application to confirm the arbitration award in Windsor Superior Court,
  seeking enforcement of the back pay provision of the arbitrator's award. 
  The

 

  application acknowledged that Roy had been reinstated and stated that he
  had presented an accounting of his lost wages and benefits but the board
  had refused to pay the back wages owed. In its reply, the board raised
  numerous affirmative defenses and filed a counterclaim claiming that
  although Roy had accepted reinstatement and signed a contract to teach for
  the 1994-95 school year, he had breached his contract by refusing to teach. 
  On June 20, 1996, the Windsor Superior Court granted plaintiffs'
  application, entered judgment for Roy in the amount of $32,306, and
  dismissed defendant's affirmative defenses and counterclaim.  The board
  appeals these determinations.(FN1)

       The board's main argument is that the arbitration award cannot be
  enforced because it did not reduce the back pay award to a specific amount,
  and therefore, was not final.  In addressing this point, we start with our
  policy toward arbitration awards and a review of the applicable law.

       "Vermont has a strong tradition of upholding arbitration awards
  whenever possible."  R. E. Bean Constr. Co. v. Middlebury Assocs., 139 Vt.
  200, 204, 428 A.2d 306, 309 (1980). This Court has long recognized the
  importance of arbitration as an alternative to litigation for the efficient
  resolution of disputes.  See In re Robinson/Keir Partnership, 154 Vt. 50,
  53, 573 A.2d 1188, 1189 (1990).  If courts were permitted to broadly
  question the determinations of an arbitrator, then arbitration would become
  merely "another expensive and time consuming layer to the already complex
  litigation process."  R.E. Bean Constr. Co., 139 Vt. at 204-205, 428 A.2d  at 309.  Instead, the trial court should, in effect, act "`as an
  appellate tribunal with a limited scope of review.'"  Matzen Constr. Co. v.
  Leander Anderson Corp., 152 Vt. 174, 177, 565 A.2d 1320, 1322 (1989)
  (quoting Wayne Insulation Co. v. Hex Corp., 534 A.2d 1279, 1281 (D.C.
  1987)).

       This case is governed by the Vermont Arbitration Act (VAA), 12 V.S.A.
  §§ 5651-5681, which is based on the Uniform Arbitration Act, see 7 U.L.A. 6
  (1997).  Under the VAA, a court shall confirm an arbitration award unless
  grounds are established to vacate or modify it. See 12 V.S.A. § 5676;
  Matzen Constr., 152 Vt. at 177, 565 A.2d  at 1322.  The grounds for vacating
  or modifying arbitration awards are limited by statute.  See 12 V.S.A.
  §§5676-5678. We will not review the arbitrator's decision for errors of
  fact or law, see Muzzy v. Chevrolet Div., General Motors Corp., 153 Vt.
  179, 184, 571 A.2d 609, 612 (1989), but rather we will confine our review
  to (1) whether there exist statutory grounds for vacating or modifying the
  arbitration award, and (2) whether the parties were afforded due process. 
  See Matzen Constr., 152 Vt. at 177, 565 A.2d  at 1322.

       The VAA does not state that an award must be final to be confirmed. 
  Nevertheless, we have required finality in similar contexts, see In re
  Central Vt. Ry., 148 Vt. 177, 178, 530 A.2d 579, 580 (1987); In re Estate
  of Webster, 117 Vt. 550, 552, 96 A.2d 816, 817 (1953), and courts applying
  statutes taken from the Uniform Arbitration Act have required finality, see
  Harris v. Allied American Ins. Co., 504 N.E.2d 151, 152 (Ill. App. Ct.
  1987).

       The arbitrator's award in this case was as final as it could be.  It
  was impossible to know when Roy would be reinstated and how much back pay
  would be due at that time.  More important, Roy acknowledged that he would
  have to offset the employment income he actually received during the period
  he was deprived of the teaching position by defendant, and the amount of
  that income was not before the arbitrator.  The arbitrator probably
  expected that once she rendered a decision, the parties would agree on the
  back pay amount.

       On the other hand, we cannot accept the trial court's conclusion that
  "all that was left

 

  was a simple calculation."  In response to the application to confirm the
  award, defendant answered that Roy had failed to mitigate his damages and
  there had been no evidence on that point.

       We believe the proper resolution of this situation is to sever the
  award and confirm the arbitrator's decision on the merits, but refer the
  matter back to the arbitrator for determination of the back pay award. 
  This resolution was adopted by the Supreme Judicial Court of Maine in
  Lisbon Sch. Comm. v. Lisbon Ed. Ass'n, 438 A.2d 239, 245 (Me. 1981), a case
  with facts virtually identical to those before us.  There, the court
  acknowledged that the trial court could make the calculation if it involved
  "the mere carrying out of a ministerial act in accordance with a clear
  formula,"  id.; see 12 V.S.A. § 5678(b)(1) (court may modify award if it is
  based on "evident miscalculation of figures"), but not where the
  calculation is more than ministerial. Lisbon Sch. Comm., 438 A.2d  at 245. 
  It held, however, that the remand need not upset the entire award:

     It is not necessary that the entire award be referred back, however;
     the finding that the Committee violated the Agreement, and the
     order of immediate reinstatement may be confirmed and enforced.
     Severing the award to allow prompt enforcement of the
     reinstatement order while providing for a definite determination by
     the arbitrator of back pay due is in accord with the principle that
     the parties bargained for an award of an arbitrator, not of a court,
     and furthers "the manifest purpose of grievance arbitration as a
     final, speedy, inexpensive dispute settlement mechanism."

  Id. (quoting Board of Sch. Directors v. Tri-Town Teachers Ass'n, 412 A.2d 990, 994 (Me. 1980).  We agree with the reasoning of the Maine Supreme
  Court.  The superior court order in this case confirmed the award of the
  arbitrator and adopted plaintiffs' proposed back pay award. On this issue,
  we agree with the confirmation order, but the superior court must remand
  the matter to the arbitrator to determine the back pay award.

       Next, the board argues that any confirmation order cannot stand
  because the manner in which the application was treated by the court denied
  it due process of law.  Plaintiffs filed an application to confirm the
  arbitration award in Windsor Superior Court on June 23, 1995 and

 

  served it like a complaint.  Attached to the application were a number of
  exhibits, including the arbitrator's decision and tax returns and wage
  statements in support of plaintiff's calculation of the back pay demand. 
  Neither the application nor the exhibits were verified.

       The board filed an answer to the application with affirmative defenses
  and a counterclaim on July 14, 1995.  On March 7, 1996 plaintiffs filed a
  memorandum of law in support of their application.  In response to
  defendant's motion for clarification, the court determined that the
  memorandum would be treated as a motion and directed that defendant respond
  within fifteen days.  The board filed a responsive memorandum on May 20,
  1996, and the court issued its decision a month later, characterizing
  plaintiffs' memorandum as a motion for summary judgment, and granting it. 
  The board generally challenges the procedure used by the superior court,
  particularly asserting as error the decision to treat plaintiffs'
  memorandum as a motion for summary judgment without notice to defendant.

       The VAA provides that "an application to the superior court under this
  chapter shall be by motion and shall be heard in the manner and upon the
  notice provided by law or rule for the making and hearing of motions."  12
  V.S.A. § 5673(a).  By specifying this route for court review, the
  Legislature clearly intended that judicial intervention would be based on
  summary procedures.

       Our motion practice rules provide for summary procedures.  When a
  written motion is filed, a party opposing it must file a memorandum within
  fifteen days of the service of the motion, unless otherwise ordered by the
  court.  V.R.C.P. 78(b)(1).  The court may dispose of a motion without oral
  argument.  Id. 78(b)(2).  An opportunity to present evidence must be
  requested and must be accompanied by a statement of the evidence the party
  wishes to offer. Id.; id. 7(b)(4).  The court must honor the request unless
  it finds from the submissions that there is no genuine issue of material
  fact.  Id. 78(b)(2).

       The superior court followed the motion rule, giving defendant fifteen
  days to respond to plaintiffs' application, once it was supported by a
  memorandum of law.  Although plaintiffs

 

  requested oral argument, neither they nor defendant requested to submit
  evidence.  See Concord Gen. Mut. Ins. Co. v. Northern Assurance Co., 603 A.2d 470, 472 (Me. 1972) ("A party is not entitled to a testimonial hearing
  on a motion to vacate or to confirm an arbitration award in the absence of
  a showing that such a hearing will disclose relevant facts.").  Pursuant to
  the rule, the court granted plaintiffs' motion without holding oral
  argument.

       This issue is somewhat confused because the board labeled plaintiffs'
  application as a motion for summary judgment, and the court picked up this
  erroneous label in its decision.  We fail to see how the board was
  prejudiced by this error.  We see no violation of the board's procedural
  rights under the VAA or our rules, and certainly see no violation of its
  due process rights.

       Next, the board argues that the court should have refused to confirm
  the award because of the affirmative defenses it raised in its answer to
  the application.  It raised the defenses of estoppel, unclean hands,
  failure to mitigate damages, lack of arbitrability, inadequate evidentiary
  support for findings, deprivation of due process of law, vagueness, and
  waiver, and sought a set-off.  Its primary defense was that the arbitrator
  lacked jurisdiction to issue the award.  Before we consider the defenses,
  we must decide whether defendant has waived them by failing to raise them
  earlier.

       Under the VAA, a court must confirm an arbitration award unless there
  are grounds to modify or vacate it.  12 V.S.A. § 5676.  Thus, the board's
  affirmative defenses are more properly characterized as grounds for
  vacating the arbitration award.(FN2)  The Act specifies, however:

     (c) An application to vacate an award shall be made within 30 days
     after delivery of a copy of the award to the applicant, except that
     if predicated upon corruption, fraud or other undue means, it may
     be made within 30 days after such grounds are known or should
     have been known.

 

  Id. § 5677(c).  In this case, the board did not move to vacate, or raise
  its defenses, within thirty days after delivery of a copy of the award, and
  none of the defenses are based on "corruption, fraud or other undue means." 
  The issue, then, is whether the board may raise the grounds to vacate
  beyond the thirty-day limit as defenses to a motion to confirm the award.

       When interpreting a statute, our goal is to give effect to the intent
  of the Legislature. See Lane v. Town of Grafton, 165 Vt. ___, ___, 689 A.2d 455, 456 (1997).  We look to the purpose behind the law and "consider the
  broad subject matter of the law, its effects and consequences, and the
  reason and spirit of the law" to determine that purpose.  See id.

       As we noted above, our policy is to uphold arbitration awards whenever
  possible and to prevent arbitration becoming another layer in the
  litigation process.  The short period allowed by statute for challenging an
  award implements this purpose.  See 1 Domke on Commercial Arbitration §
  33.02 (rev. ed. 1996) (short challenge time is "necessary to effect the
  speed and dispatch that is an essential part of the arbitration process"). 
  We would undermine the statutory purpose, and the effectiveness of
  arbitration, if we held that a party who lost before the arbitrator could
  raise defenses at any time in response to a motion to confirm.  Indeed, the
  incentive would be to refuse to comply with the arbitration award and to
  raise defenses as late as possible.

       This case is an excellent example of how the legislative purpose can
  be subverted by the board's approach.  The underlying grievance was filed
  in June of 1992.  The arbitrator issued her opinion and award in December
  of 1993.  Because of delays in Roy's reinstatement, the issue of back pay
  did not come to a head until June 1995.  Even without taking evidence, the
  court took a year to rule on the board's defenses, rendering a decision in
  July of 1996.  Thus, a process that is intended to be speedy and efficient
  took four years to reach a final decision, without considering the appeal
  to this Court.  As we forewarned in Bean Constr. Co., we have reached a
  point where we now have both arbitration and litigation.

       Courts in states that have adopted the Uniform Arbitration Act have
  uniformly ruled that

 

  a party to arbitration must bring a timely motion to vacate in order to
  raise grounds to vacate as defenses to confirmation.  See, e.g.,
  Mid-America Regional Bargaining Ass'n v. Modern Builders Ind. Concrete Co.,
  427 N.E.2d 1011, 1013 (Ill. App. Ct. 1981) (collecting cases); State Dep't
  of Admin. v. Sightes, 416 N.E.2d 445, 450 (Ind. Ct. App. 1981).  We
  acknowledge, however, that in language we have not adopted, the Uniform
  Arbitration Act is more explicit on this point.(FN3) See Uniform Arbitration
  Act § 11 in 7 U.L.A. 6, 264 (1997).  Courts interpreting the Federal
  Arbitration Act have reached the same conclusion, see Cullen v. Paine,
  Webber, Jackson & Curtis, Inc., 863 F.2d 851, 853-54 (11th Cir.), cert
  den., 490 U.S. 1107 (1989) (analyzing cases from all circuits).  That
  statute has wording that is very similar to that of the VAA.  Compare 9
  U.S.C. § 9 (FN4) with 12 V.S.A. § 5676.  We follow the federal decisions

 

  and hold that a party may not raise affirmative defenses to an application
  to confirm an arbitration award unless it does so within the time limit for
  moving to vacate an arbitration award as specified in 12 V.S.A. § 5677(c).

       The board argues that even if there is a time limit for raising
  affirmative defenses, it does not apply to its claim that the arbitrator
  exceeded her jurisdiction because that can be raised at any time.  See
  Boisvert v. Boisvert, 143 Vt. 445, 447, 446 A.2d 1184, 1185 (1983) (absence
  of subject-matter jurisdiction may be raised for first time on appeal). 
  The issue here is very similar to that in In re Denio, 158 Vt. 230, 234,
  608 A.2d 1166, 1168 (1992), where we held that a party could not raise for
  the first time in this Court the lack of Environmental Board jurisdiction
  in an Act 250 proceeding.  We relied on the absence of any statutory
  authority for special treatment of jurisdictional claims, adding:

     This omission is significant because for an administrative board of
     limited jurisdiction virtually any disagreement with its actions can
     be phrased in jurisdictional terms. . . . [If the appellant prevails],
     . . . the most important decisions on the scope of Act 250 will be
     made without involvement of the Board or its expertise.

  Id. at 235, 608 A.2d  at 1169.

       We think the reasoning of Denio applies in this case.  The VAA
  requires that motions to vacate awards be made within thirty days in all
  cases.  See 12 V.S.A. § 5677(c).  Indeed, some of the grounds that are
  specifically subject to the time limit are fairly labeled as
  jurisdictional.  See id. § 5677(a)(3),(5) (grounds include "the arbitrators
  exceeded their powers" and "there was no arbitration agreement").  We
  cannot construe the statute to exempt jurisdictional claims from the time
  limit.  See Schroud v. Van C. Argiris & Co., 398 N.E.2d 103, 105-06 (Ill.
  App. Ct. 1979).

       Moreover, the same considerations discussed in Denio apply here.  Many
  of the challenges to an arbitration award can be characterized as
  jurisdictional.  The usefulness of arbitration is undermined if issues can
  be withheld from the arbitrator and raised for the first time in court long
  after the arbitration is over.  These considerations reinforce our
  construction

 

  of the statute to require that jurisdictional challenges be raised within
  the statutory time limit for a motion to vacate.

       Finally, the board claims that the court erred in dismissing its
  counterclaim against plaintiff Joseph Roy.  In the counterclaim, the board
  charged that Roy accepted a new position in the ODP on June 24, 1994 and
  signed a contract, received a paycheck for future work in August, and
  thereafter resigned without returning the money paid to him.

       A counterclaim is a mandatory or optional part of a responsive
  pleading, filed in response to a complaint.  See V.R.C.P. 8(a), 13.  The
  civil rules contain no authorization for filing a counterclaim in response
  to a motion, and the VAA does not authorize the filing of a counterclaim in
  response to a motion to confirm an award.

       We believe this issue is governed by Ward v. Ward, 155 Vt. 242, 247,
  583 A.2d 577, 581 (1990), where we held that a divorce defendant could not
  file a tort counterclaim in response to the divorce complaint.  We held
  that allowing such a counterclaim was inconsistent with the nature of the
  divorce proceeding, id. at 245, 583 A.2d  at 579, and that it was impossible
  to protect the right to trial by jury on the counterclaim and provide
  expeditious relief in the underlying divorce.  Id. at 247, 583 A.2d  at 581. 
  Similarly, allowing a counterclaim in response to a motion to confirm an
  arbitration award is inconsistent with the summary procedure the
  legislature has established.  Further, It would be difficult in such
  circumstances to ensure expeditious relief to the prevailing party and at
  the same time protect the procedural rights of the counterclaimant,
  particularly the right to trial by jury.


       The court was correct to dismiss the counterclaim.  The board is, of
  course, free to bring a separate action against Joseph Roy if it desires.

 

       It may not, however, delay arbitration relief by attempting to
  interrelate its separate contract claim with the arbitration confirmation.

       The judgment for lost wages and benefits is vacated and the cause is
  remanded for remand of that issue in turn to the arbitrator.  In all other
  respects the decision of the Windsor Superior Court is affirmed.

                              FOR THE COURT:



                              _______________________________________
                              Associate Justice



  ------------------------------------------------------------------------------
                                  Footnotes




       FN1.    The board contends that VT-NEA lacked standing to move to
  confirm the arbitration award and that Joseph Roy was not a party.  This
  contention was based on the identification of plaintiffs' counsel under the
  signature line as "Donna M. Watts, Attorney for Plaintiff Vermont-NEA, 10
  Wheelock Street, Montpelier, VT 05602-3737."  The board reads this line as
  meaning that counsel represented only VT-NEA.

       The board's reading is too narrow.  The title to the application
  indicates it was brought in the name of Joseph Roy and VT-NEA.  These names
  also appear immediately above the signature line.  It is clear that counsel
  represents both these parties, and the information under the signature line
  represents counsel's office address.

FN2.  Because of our disposition, we assume, without deciding, that
  any of the affirmative defenses the board raised could have been raised in
  a motion to vacate.

FN3.  Section 11 of the Uniform Arbitration Act provides that:

     Upon application of a party, the Court shall confirm an award,
     unless within the time limits hereinafter imposed grounds are urged
     for vacating or modifying or correcting the award, in which case
     the court shall proceed as provided in Sections 12 and 13.

       (Emphasis supplied.)  Section 12(b) provides that a motion to vacate
  must be made within ninety days after delivery of a copy of the award to
  the applicant.  The VAA, 12 V.S.A. § 5676, does not contain the language
  underlined above.

       Ordinarily, when the Legislature models a statute after a uniform act,
  but does not adopt particular language, we conclude that the omission was
  intentional such that the policy of the uniform act was rejected.  See
  Lemieux v. Tri-State Lotto Comm'n, 164 Vt. 110, 115, 666 A.2d 1170, 1174
  (1995); Justis v. Rist, 159 Vt. 240, 244, 617 A.2d 148, 150 (1992).  As our
  discussion in Justis v. Rist reflects, this conclusion is not automatic and
  we must look at the policy behind the legislation.  In this case, because
  of the purpose of the statute, the effect of the alternative result on
  implementation of that purpose, and the other available model in the
  Federal Arbitration Act, we conclude that the Legislature intended the same
  result as the Uniform Arbitration Act although it did not fully adopt the
  uniform act's language.

FN4.  The relevant language of the FAA states that the court must
  confirm the award "unless the award is vacated, modified, or corrected as
  prescribed in sections 10 and 11 of this title." 9 U.S.C. § 9.  Like the
  VAA, 12 V.S.A. § 5676, and unlike section 11 of the Uniform Arbitration
  Act, the language does not have an explicit reference to the time limits
  applicable to a motion to vacate an award.